The Opportunity
During the mid 1980’s the five largest banks in California decided to join forces and form a new point of sale payment mechanism that all ATM cardholders of those banks could use. They wanted a way to reduce the volume of checks and cash deposited in local branches by migrating transactions to an electronic form of payment. The program was called INTERLINK. The value proposition was strong.
- Provide the cardholders with a fast and secure way to pay
- Provide the merchants with a faster and simpler payment mechanism
- Reduce bank operations costs and generate a new revenue stream
Each bank was obligated to develop the technology to allow cardholders to participate. Each bank also had the option to pursue the merchant-side of the product where ATM cards would be used.
The Solution
One of those banks, Crocker Bank, embarked on developing the cardholder technology. The project was well defined, but the team needed a leader. The bank hired the principle partner of Keystone Advisors to lead the effort through the development and implementation stages and to manage the program going forward.
The Result
The program was released on schedule. On top of that, the STAR and CIRRUS ATM Network access was implemented at the same time. Bank branches were provided with thorough information about the service. Special pre-funded cards were provided to select employees as individual bonus payments and promotional material. These special cards were actually the first time anonymous prepaid cards were used at the point of sale.
Communications were sent to cardholders in the form of personalized letters, statement messages and statement inserts. Several merchants offered discounts to cardholders for trying the service. Results indicated that after the consumer used their ATM card at the point of sale twice, they tended to be “hooked”. INTERLINK transaction volume grew at a rate of 36% each month. The dollar value of those transactions grew at a rate of 53%. The program exceeded expectations.